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The authorities say that it helped clients beat the Belgian tax system Reuters

Belgian prosecutors have accused the private banking arm of HSBC of facilitating tax fraud and money laundering to the tune of hundreds of millions of euros.

HSBC Private Bank, a subsidiary which is based in Switzerland, allegedly helped hundreds of wealthy clients engage in tax fraud by burying taxable income and assets in shell companies based in tax havens.

Over 1,000 taxpayers, many of whom are said to be involved in the Antwerp diamond trade, are alleged to have been involved in the fraud, which dates back to 2003. Belgian authorities said the lost tax revenue could run into hundreds of millions of euros.

Belgian prosecutors accused HSBC of "having knowingly eased and promoted fiscal fraud by making offshore companies available to certain privileged clients".

The Swiss subsidiary is being charged with serious and organised fraud, criminal conspiracy, money laundering and illegally operating as a financial intermediary, according to a statement.

Belgium's justice minister had demanded an inquiry into possible tax fraud in the country's rich diamond trade in 2012. French authorities had handed the country a list of dozens of diamond dealers who were suspected of having placed their assets in Switzerland.

The homes of 20 wealthy account holders at the bank were searched in October last year as part of the investigation.